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Hospitals excluded from MTA tax reforms; want bill to phase out tax for all suburban employers by 2014

Good Monday morning! If you are among the many Americans struggling to snap out of the Super Bowl hangover, just think – you could be a Patriots fan. (My condolences if that happens to be the case).

In today’s edition of the Westchester County Business Journal, our bureau chief John Golden wrote about local hospitals’ exclusion from changes that were made to the MTA tax in December.

While the changes reduce or eliminate the MTA tax for hundreds of thousands of employers in the Hudson Valley and Long Island, hospitals were largely omitted – a mistake, according to NorMet’s Kevin Dahill:

“Clearly the MTA payroll tax is an issue for our members,” said Kevin Dahill, president and CEO of the Northern Metropolitan Hospital Association (NorMet), representing hospitals in Westchester and six other Hudson Valley counties, and the Nassau Suffolk Hospital Council, representing Long Island hospitals. The Suburban Hospital Alliance is the joint advocacy arm of the two groups. “We were making the case that for hospitals to have to pay a tax like this is ridiculous.”

Dahill has been a strong critic of hospitals’ exclusion from a job creation and tax reform agreement announced in December by Gov. Cuomo and leaders of the state Legislature that would eliminate or reduce the MTA tax for approximately 295,000 employers and raise the income exemption for self-employed taxpayers within the Metropolitan Transit Authority’s commuter service region.

Though the proposed changes would exempt private schools from the tax, hospitals stand to receive no relief. Dahill said the alliance’s member hospitals in the Hudson Valley and on Long Island collectively pay about $20 million annually to support the MTA tax. Hospitals are often the largest employers in the MTA commuter region, supporting 150,000 jobs and $23 billion in economic activity annually, according to Dahill.

The Suburban Hospital Alliance has responded by lobbying the Legislature to consider a new bill that would exempt all suburban employers from having to pay the MTA tax by 2014. While small businesses have clearly suffered the wrath of the economy over the past several years, hospital revenue has also plummeted, which means Albany had best consider the Alliance proposal.